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From: Washington Post – 5/15/12

SALT LAKE CITY — Utah’s chief technology officer has resigned following the theft of hundreds of thousands of online medical records from state computers by unknown hackers.

Gov. Gary Herbert on Tuesday announced a “comprehensive” response to the massive data breach, including the resignation of Stephen Fletcher, director of the state’s Department of Technology Services.

Herbert’s office said the state also is hiring a public relations firm to handle crisis communications.

Last month, hackers stole personal information of about 780,000 Medicaid recipients and participants in the Children’s Health Insurance Program, including the Social Security numbers of about 280,000 of them.

Read more here…

From CHA – 5/14/12

Gov. Brown’s May revision to the state budget for fiscal year (FY) 2012-13 includes $325 million in savings for the state General Fund that will have a direct impact on hospitals. The May revision estimates the budget deficit at $15.7 billion, up from $9.2 billion, due to a decrease in revenue, higher expenses, and decisions by courts and the federal government to block previous budget cuts from being implemented. Overall, the governor’s new budget plan proposes $4.1 billion in spending reductions, in addition to the $4.2 billion already put forward earlier this year. Budget solutions related to Health and Human Services include the following:

Hospital Fee Program – Increase payments made by private hospitals to the state for children’s health care coverage by $150 million in FY 2012-13 and $75 million in FY 2013-14. In addition, designated public hospitals would give up some of the fee-funded direct grants and managed care payments to generate $41.5 million in state General Fund savings for FY 2013-14.

Diagnosis-Related Group (DRG) Transition – Freeze base payments for FY 2012-13 with no increases to per-diem rates or non-contract cost increases. This is expected to save the General Fund $75 million in FY 2013-14. The transition to a DRG payment system would be delayed by six months to July 1, 2013.

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From: The HILL’S Healthcare Blog – 5/10/12

The Health and Human Services (HHS) Department touted new rules easing the regulatory burden on hospitals and healthcare providers to the tune of more than $5 billion in savings over five years.

The changes will “cut burdensome red tape for hospitals and providers” and allow them to “improve patient care while lowering costs,” Marilyn Tavenner, acting administrator for the Centers for Medicare and Medicaid Services (CMS), said in a statement.

The first rule issued Thursday will make small revisions to the Medicare Conditions of Participation in order to give hospitals more flexibility in their operations. One change would allow “a patient or his or her caregiver to administer certain medications,” a release stated, facilitating “patient-centered care.”

The second rule would eliminate overlapping or outdated rules that govern healthcare providers.  A release added that the steps are in line with “President Obama’s regulatory reform initiative to reduce unnecessary burdens on business.”

“We are cutting red tape and improving health care for all Americans,” HHS Secretary Kathleen Sebelius said in a statement.  “Now it will be easier for health care providers to do their jobs and deliver quality care.”

Click here to view HHS Press Release.

HHS: New cuts to ‘red tape’ to save billions for healthcare providers

From: DHCS California – 5/7/12

News Release Excerpt:

 SACRAMENTO – The California Department of Health Care Services (DHCS) announced that California and 45 other states, as well as the District of Columbia, have reached a $1.5 billion civil and criminal settlement and a $100 million civil consumer protection settlement with Abbott Laboratories to settle false claim act lawsuits and federal investigations into alleged illegal acts with respect to the drug Depakote, including illegal marketing, making false and misleading statements and paying kickbacks.

Under the civil and criminal settlement, California and the United States will receive a combined $52 million plus interest. Of this amount, the United States will receive $21.3 million, and California will receive $30.7 million. Of the California amount, DHCS will receive $15.3 million as damages for the Medi-Cal program. A portion of California’s recovery will be deposited into the Attorney General’s False Claims Act Trust Fund, which is administered by the California Department of Justice’ Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA) to investigate and prosecute Medi-Cal fraud. DHCS assisted BMFEA with settlement agreement language that protects the interests of DHCS and Medi-Cal. Under the separate civil consumer protection settlement, California will receive $6.7 million, the largest share of any state.

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Department of Health Care Services Announces Multimillion Dollar Settlement with Abbott Laboratories

CMS 2010 SSI Data File Posting/Removal – Sloppy Oversight

From: Toyon Associates – 5/4/12

As reported to you in a separate e-mail on Wednesday (5/2), CMS temporarily released the 2010 SSI file for use in the calculation of the Medicare DSH reimbursements.  After review of the data released, it was clear that something was seriously wrong with the file, as matched SSI days declined by 30% over FY 2009.

Prior to the March 2012 release of the SSI data for FYE 2006 – 2009, the Provider community had been waiting for over two years for SSI information.  This delay has backed up the finalization of tens of thousands of Hospital cost reports. 

What is disturbing about the temporary post on Wednesday is the utter lack of reasonableness testing of the 2010 file.  A quick summary of the past 4 years would clearly point out that something didn’t work in the 2010 match.  Check this summary that was put together as we were analyzing the released data in total:

 A simple check of the files prepared for the previous three years would have clearly demonstrated that something was wrong.  If CMS would be so careless in releasing this type of data, what else have they been allowing out that has not had appropriate review for reasonableness?

The impact of this CMS release was jaw dropping.  Those hospitals and hospital systems that pulled the data Wednesday morning were already reporting to their senior management the devastating financial impact of the new percentages.  Given the long delay in SSI issuance, the financial impact of the SSI is projected for multiple years.  Nationally, this erroneous SSI file impacted billions of dollars in Medicare DSH entitlements.

I believe the Provider community has every reason to expect better and more careful analysis by CMS of the data they release.  Hopefully, this is a bit of a wake-up call for CMS. 

Disruptions seen for Medicare provider payments if Supreme Court strikes down health care law

From: The Washington Post – 5/3/12

Article Excerpt:

WASHINGTON — Medicare’s payment system, the unseen but vital network that handles 100 million monthly claims, could freeze up if President Barack Obama’s health care law is summarily overturned, the administration has quietly informed the courts.

Although Obama’s overhaul made significant cuts to providers and improved prescription and preventive benefits, Medicare was overlooked in Supreme Court arguments that focused on the law’s controversial requirement that individuals carry health insurance. 

Yet havoc for Medicare could have repercussions as both parties avidly court seniors in this election year and as hospitals and doctors increasingly complain the program doesn’t pay enough.

In papers filed with the Supreme Court, administration lawyers have warned of “extraordinary disruption” if Medicare is forced to unwind countless transactions that are based on payment changes required by more than 20 separate sections of the Affordable Care Act.

Opponents say the whole law must go. The administration counters that even if it strikes down the insurance mandate, the court should preserve most of the rest of the legislation. That would leave in place its changes to Medicare as well as a major expansion of Medicaid coverage.

Last year, in a lower court filing on the case, Justice Department lawyers said reversing the Medicare payment changes “would impose staggering administrative burdens” on the government and “could cause major delays and errors” in claims payment.

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U.S. charges more than 100 for Medicare fraud schemes

From: Reuters – 5/2/12

Article Excerpt:

U.S. authorities have charged 107 people, including doctors and nurses, for trying to defraud the federal Medicare healthcare program for the elderly and disabled of about $452 million, the biggest Medicare fraud sweep to date, the Obama administration said on Wednesday.

At least 91 people were arrested in Miami; Houston; Baton Rouge, Louisiana, and four other cities on a variety of charges: from submitting false billing for home healthcare, mental health services, HIV infusions and physical therapy to money laundering and receiving kickbacks.

Justice Department and Health and Human Services Department officials were unable to say how much Medicare actually paid out, but a review of 34 complaints and indictments found that authorities were seeking to recover at least $59.5 million of allegedly ill-gotten gains.

“These fraud schemes were committed by people up and down the chain of healthcare providers – from doctors, nurses, and licensed clinical social workers, to office managers and patient recruiters,” said Lanny Breuer, assistant attorney general for the Justice Department’s criminal division.

President Barack Obama’s administration has been pushing to squeeze out fraud from federal programs like Medicare as part of a broader attempt to stem soaring healthcare costs, arguing fraud can contribute to rising prices for services.

Breuer said that it is the single largest Medicare billing fraud sweep by the Justice Department’s special task force in its five-year history. In September, the Obama administration charged 91 people in connection with a variety of schemes aimed at bilking Medicare out of $295 million.

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From: The Hill’s Healthcare Blog – 4/25/12

Article Excerpt: 

Hospitals criticized the Medicare agency Wednesday for a payment policy that doesn’t account for automatic, across-the-board cuts scheduled to take effect in January. Lawmakers are looking for ways to replace the sequestration cuts. But if they don’t find one, doctors and hospitals will see a 2 percent drop in their Medicare payments beginning next year.

The Centers for Medicare and Medicaid Services (CMS) didn’t factor in the sequester when it set next year’s payment rates, the American Hospital Association said. CMS proposed its payment rates Tuesday.

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Hospitals say Medicare agency overlooked looming cuts

From: Kaiser Health News – 4/23/12

Article Excerpt:

Trustees of the Medicare program today forecast increased financial troubles as a result of an aging population and rising health care costs, increasing the visibility of an issue that is already proving divisive in the 2012 presidential and Congressional campaigns.

“Both programs took a turn for the worse this year,” trustee Charles Blahous III, a senior
research fellow at George Mason University in Virginia, said of Medicare and Social Security.

Overall, the outlook for the Medicare program which covers nearly 50 million elderly and disabled people was only slightly worse than findings from last year. Once again, trustees forecast that Medicare’s hospital fund would begin to run out of money beginning in
2024, but many experts place little importance on the trustees’ projection since the program’s insolvency has been forecast from as little as two years away to as many as 28 years since 1970.

Today’s report emphasized that Medicare costs in both the short term and long term would rise higher than previously reported, but that these costs would be offset by 2 percent cuts to
the program agreed to in last year’s deficit reduction agreement, unless Congress passes an alternative cost-cutting plan.

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From: The Atlanta Journal- Constitution – 4/18/12

Article Excerpt:

Personal and health information for about 315,000
patients is missing, Emory Healthcare announced Wednesday. The hospital system
has been unable to find 10 computer discs containing the data.  The missing discs held information on all
patients who had surgery at Emory University Hospital, Emory University
Hospital Midtown and The Emory Clinic Ambulatory Surgery Center between
September 1990 and April 2007. The discs contained protected health
information, including patient names, along with the diagnosis, the name of the
surgical procedure and the surgeon. Approximately 228,000 of the patient
records also included Social Security numbers.

“We sincerely regret
that this incident has occurred and we want to assure our patients that we are
committed to safeguarding their personal information,” John T. Fox,
president and CEO of Emory Healthcare, said at a press conference.

Emory has no evidence that
any information contained on the discs has been misused. Emory is sending
letters to affected patients and offering them free identity protection and
credit monitoring services. An investigation is ongoing to try to determine
what happened to the discs. It’s not certain that the information was stolen,
Fox said. It could simply have been misplaced. The discs were removed
sometime between February 7 and February 20, the investigation has determined.

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Patient Data Missing for 315,000 Emory Patients